Need to hire the best talent? Trust your current employees? Referral bonuses are bonuses given to your employees who bring new, trustworthy workers into your company. These bonuses are becoming popular in the tech industry, particularly in areas like Silicon Valley. Mission bonus: Also referred to as 'task bonuses', these are given to teams of your employees for completing important projects.Usually it’s to establish goodwill or buy out a salary or deal from the previous employer. Popular in the athletic world, sign on bonuses are extra money given to someone who was just hired for a position. This can include anything from a certificate, to a trophy, to a plaque that says 'Employee of the Month.' Typically in smaller amounts – think $50 – these can be given by any supervisor or high-level management person. You pay out the bonus to your employee for statistical improvements.ĭid one of your employees do something amazing that deserves recognition in the form on money right as it happens? Enter the spot bonus. These type of programs are usually used in the manufacturing industry. Whether or not an employee receives it depends on the profitability of your company. You set aside a preset amount of payroll dedicated for bonuses (on top of salaries). A very common approach to dishing out bonuses is the current profit sharing method.Now, these are the two ways to tax a bonus – but how many type of bonuses actually exist? See below: All of this is based on the withholding tables for your state. Then, you must determine the withholding for both amounts, subtract what was deducted from his or her last check, and then withhold the rest from the bonus. The aggregate method happens when you add a bonus to your employee’s most recent paycheck. For example, if you give an employee a $5,000 bonus, $1,250 is taken out for taxes. The percentage method is a flat 25% of anything supplemental to your employees' wages, i.e. When it comes to taxing bonuses, there are only two different methods: the percentage and the aggregate.

Different bonus types